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Outlook and growth opportunities in the UAE transport system

Since 2014, the prices of oil dropped to about 70 percent of what they used to be but the UAE, as would be expected, was not very deterred. The government has been putting into place diversification projects that allow them to be confident of a good economic standing even with the overarching global economic uncertainties. Infrastructural development initiatives are expected to be one of the drivers of economic growth in the region.

The plan to integrate a logistics function and to create harmony with the regulations of the GCC is bound to bring about a regional network that is interconnected.

There has been increasing trade within the UAE and with the European and Asian nations. Utilization of this factor to develop and encourage investments in the development of the UAE ports will enable the UAE to comfortably cater to the needs of trade. One of the major opportunities for investors is to put their money in projects related to the EXPO 2020. It promises to play a major role in logistics and growth in the industry in the next two or so years.

Another opportunity that the sector provides is to companies that play in directly to the construction and maintenance of infrastructure. The UAE has been turning to other sectors of the economy that are not oil-related. Companies for example who offer modernization and expansion of logistics will be expected to benefit richly. The UAE is also expected to benefit, owing to its membership in the GCC, from developments in trade policy and the improvements in regional transport systems.

The GCC’s infrastructure keeps becoming more and more significant as the region grows as a transshipment base for Asian and European trade. Their level of integration will inspire and to a big extent drive the development of a multi-modal transport system in the UAE. It will offer an unprecedented opportunity for the development of local service providers in the area of logistics in the region.

The developments have also resulted in an increase in domestic demand for industrial centers and zones that will be able to support trade within and without the region. This fact, when married with the embrace of new technologies, will likely strengthen the requirements for a transport system that is functional, both on a local level and a regional level.

Another factor that plays well in the UAE transport system is the expansion of the airport. It will provide an alternative means of cargo transport and ease inter-regional trade. It will increase the number of opportunities for traders too.

One of the reasons trade has been difficult in the region has been the customs regulations. Now, the government has been working to see that regulations they put in place do not impede their development. An example is a lift on the sanctions on Iran. This will lead to an increase in the regional trade activities and enable the region to be able to meet the demand for outsourcing logistics services.

In 2015, the sector contributed to over $29 billion to the UAE GDP. There are numerous opportunities to get this figure even higher within a span of less than a decade.